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Question

The maximum amount beyond which a company cannot raise share capital is called its _________.

A
authorized capital
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B
declared capital
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C
issued capital
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D
subscribed capital
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Solution

The correct option is A authorized capital
As per section 2(8) of companies act, 2013 'Authorised capital' is the maximum amount of the capital for which shares can be issued by the company to shareholders. It is mentioned in the Memorandum of association of company, decided prior to the incorporation of the company.

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